Litigation

New York Structured Settlement Vig Takers May Not Be Able to Hide From Dinallo

By John Darer

The draft regulations issued earlier this week by the New York Insurance Department include rules that establish "minimum disclosure requirements." Those requirements include the nature and amount of compensation, as well as language that tells consumers an agent "may have incentives" to recommend a particular policy "based on the amount of compensation paid." It also includes a mechanism for clients to request information about producers' compensation which was not known at the time of sale - in other words, contingent commissions.

It will be interesting to see how the National Structured Settlement Trade Association reacts to the proposed rules given its very public rejection of the structured settlement transparency initiative, a voluntary effort to provide transparency to tort victims, judges and plaintiff attorneys who work with structured settlement professionals.

The subject of disclosure of factoring kick backs and broker/planner business practices has surprisingly been an extremely volatile topic of discussion in the structured settlement industry. Despite the shocking disclosure that the overwhelming majority of structured settlement broker/settlement planner clientele of Bentzen Funding Solutions are on the take, the overwhelming majority of the industry operates in the shadows and alleyways on the topic. We know people are doing it, but few seem willing to own up to it. This author's Brandeisian effort of "shining light as disinfectant" was even inarticulately labeled McCartheyesque. Any such transparency intiative by the New York Insurance Department should involve mandatory disclosures of ALL PARTIES to whom compensation is made so that CONSUMERS can have a proper understanding  about how such compensation affects the pricing and so they have the ability to negotiate.

This author supports an amendment to New York's Structured Settlement Protection Act which would require mandatory disclosure of all parties to whom compensation is made in structured settlement factoring transactions.

Full post as published by Structured Settlements 4Real on February 09, 2009 (boomark / email).